1. Introduction to the Insurance Policy

Question 1

What is an Insurance Policy?

Answer 1

• Policy between Insured & their Insurance Company.
• Written document detailing extent of cover being provided by Insurance Company to the Policyholder.

Question 2

What are the various sections covered in policy but not limited too?

Answer 2

• The promise or operative clause
• Definitions
• Perils
• General Conditions
• General Exclusions

Question 3

Operative Clause generally starts with Insurer agrees too, what is the agreement?

Answer 3

• agreeing to provide policy cover once payment of premiums is made subject to the terms of the policy.

Question 4

What is the Promise or Operative Clause?

Answer 4

• Part of the policy wording that confirms factors to be in place for policy to be in operation.
• Series of words that forms agreement between PH & Insurer.
• Claim only covered if policy is in force & accepted by both parties.
• Without confirmation that both parties have fulfilled promise no contract exists

Question 5

What enquires should be made to check that a property/item has been lost or damaged?

Answer 5

• Loss adjuster visit and inspection
• Photographs of damaged item
• Independent reports from surveyors
• Crime references/police reports

Question 6

Value of Property - What will Insurer’s pay?

Answer 6

• No more than the item/property’s value at time of loss.
• LA to establish value of lost or damaged item

Question 7

What does the definition section of the policy set out?

Answer 7

• Exactly what the Insurer means by the words used in their policies

Question 8

General Conditions - What are some general conditions found in policies?

Answer 8

1. Notification of Claim - requires PH to notify Insurer immediately of the loss or claim, some specific timelines are provided.
2. Notification to Police - In event of theft or malicious damage, condition usually states police to be notified immediately.
3. Preventing Loss - often requires PH to take all reasonable steps to prevent loss or damage and maintain the property in a good condition and state of repair and PH to take action to mitigate loss.
4. Fraud - Condition highlights Insurers can cancel policy if claim or any part of claim is found to be fraudulent or false.
5. Contribution and Average (underinsurance)
6. Changes that must be notified to Insurers (material facts) - confirms PH responsible to notify Insurer’s of changes to the risk.

Question 9

What are general conditions applicable too?

Answer 9

• Whole policy.
• Insurer’s have right to cancel and cease providing any further cover if a condition has not been adhered too.

Question 10

What are general exclusions applicable too?

Answer 10

• Whole policy
• General exclusions are used to reject cover for specified reasons
• Examples, War Risk, Terrorism Exclusion, Riot, Consequential loss etc.

Question 11

What is the notification of claim condition?

Answer 11

• requires PH to notify insurer immediately of loss or claim.
• some policies have specific timescales

Question 12

What is the notification of police condition?

Answer 12

• for theft & malicious damage claims normally state police to be notified immediately

Question 13

What is the preventing loss condition?

Answer 13

• Often requires PH to take reasonable steps to prevent loss/damage and maintain property in good condition
• PH to take action to mitigate loss

Question 14

What is the fraud condition?

Answer 14

• Insurer’s can cancel policy & cover ended if claim or any party of claim is found to be fraudulent

Question 15

What is the material facts condition?

Answer 15

• responsibility of PH to notify insurers of any changes to risk